#6 of 27 Awesome Growth Hacks

Step By Step Cheat Sheets That’ll Increase Your Businesses Bottom Line.

Tapping Into Your Most Valuable Asset

If I had to choose one shortcut to success for most businesses, one overlooked goldmine, then it would be database marketing.

According to the Direct Marketing Association you can expect ten responses from your in-house database for each one from your other list.

Their research shows that a mailing to an in-house list will generate an 18% response, and the other list will pull less than 2%, even if the demographic fit is spot on.

I have to say, my own experience also bears this out.

It’s the easiest, quickest and simplest route to sales and profits, but one that many businesses choose to ignore completely.

The fact is, there’s money in my database and plenty of it.

Database Marketing: The Basics

Ok, if you’ve never had a database before, or even thought that you needed one, this section is for you…

If someone comes into contact with your business, chances are, they’re interested in what you’ve got to sell.

It doesn’t matter whether they buy from you right now or not, you need to know who they are.

Whatever you do, don’t let them out of your sight, out of your store, off your webpage, or out of your restaurant before you know who they are and how you can contact them.

Probably more than any other Module – this one can literally transform your business.

The cost of getting an existing customer to buy from you again is MUCH lower than the cost of acquiring that customer in the first place.

Keeping in touch with them would be a smart and entirely sensible thing to do.

Building And Managing Your Database

Be warned though, a substantial customer database can’t be built overnight.

Getting the basics right though, will mean that over time you’ll develop a very valuable tool.

  • Step 1 – Define the information you need to collect

Before you start collecting data, you need to decide exactly what information it is that will be beneficial for your business and how you want to communicate with your database.

Here’s what I’d recommend as your starter

First Name and Surname – Collect these in separate fields, it makes life much easier later on.

 

Contact Information – I’d prefer to have email address and postal address, because knowing where they live is useful data in itself, but if you think you’re going to call them, make sure you ask for their phone number.

 

One Other Relevant Detail – This is your chance to begin to categorise your list. Work out what’s important to your business

  • Step 2 – Work out how you’re going to collect it

Getting contact information from your customers and prospects is often as simple as asking for it

Here are my top 4 strategies for getting your hands on contact information:

1. Give Away Information

In the online world, people are much more likely to give you their email address if you’re going to send them something straight away that they’re interested in. The information needs to be something valuable that they can’t easily get elsewhere for free.

 

2. Exclusive Special Offers

If you send special offers to your list that aren’t available to the general public, you’ll be giving people a reason to give you their details

 

3. Offer a Trial of your Product or Service

Read the ‘Irresistible Offers’ blueprint for some great examples of businesses using the Free Trial strategy to build their businesses. It works particularly well if your product or service is complex, or if you are operating in a competitive market.

 

4. Running a Competition or Prize Draw

This is a sure-fire way to build your database fast. Loads of people like to enter free competitions and prize draws, so offering a big, well-promoted prize could add thousands of new records to your database.

The big downside of this strategy is that you have to accept that many people will enter just for the chance to win. So make the prize relevant to your product or service.

The more removed your prize is from your product, the more time, money and energy you’ll expend finding the value in your new database.

I’d rather have a database of 500 people who were very interested in what I was selling, than 1000 interested people buried in a database of 50,000 names that I’d harvested through a big prize draw promotion.

Never be afraid to ask your customers for their contact information. If you make it a part of every sales transaction it will soon become routine – and you’ll steadily build your database.

  • Step 3 – Managing your database

Whatever software you decide to use to manage your database, make sure that YOU know the basics of how to use it, and be sure to make regular (preferably automatic) backups. Prepare for the worst possible eventualities.

As a business owner you CANNOT hand over full responsibility for this to anyone else. Sure, they can help and administer things for you but you have to know enough about it yourself.

I use different database software – PromoSoftware to manage my business, Xero to manage my accounts and Mailchimp to manage my sales automation and email marketing

They’ve all got different levels of functionality and help me manage different areas of my business.

When you’re up and running, make sure that everyone in your business understands the importance and the value of the database, and limit their access to it.

I only allow a handful of my most trusted employees full admin access to my database.

Keeping In Touch

Once someone has found their way into your database, you’ve got to keep in touch with them regularly.

Whether you use email, snail mail, or phone calls, the goals of keeping in touch are the same, here are the top 3 most important goals that you should look to achieve with your database:

  • Remind them that you’re still there and what you do
  • Remind them that you’re still there and what you do
  • Remind them that you’re still there and what you do

That’s what it’s all about. Just reminding your prospects and customers that you’re still there, you’re still doing business, and you’d love it if they could drop by sometime.

You need your passion and enthusiasm to shine through in your emails, newsletters and mailings. If it’s not valuable and fun, then it won’t get read.

There are loads of ways that you can communicate with your database:

  • A monthly mailed newsletter
  • Regular informal emails from you
  • Irregular postcards with offers on
  • Handwritten letters
  • E-zines
  • Mini-courses on topics that you have unique expertise
  • Regular reports that are appropriate for your market
  • Mailing (or offering to mail) freebies, samples and trials
  • Podcasts and Videos
  • Exclusive invitations to events

You don’t need to limit yourself to one option; you can mix them up and see which get the best reaction.

Advanced Stuff

The kind of information you’ll need to collect will vary hugely depending on what you’re selling.

You mighty want to know:

  • What products / services are selling
  • When a customer last placed an order
  • How valuable is a customer to you
  • What orders are you waiting to be delivered

Whichever business you’re running, there are some universal data points that will apply.

The most important of these is a traditional technique called RFM segmenting. RFM stands for Recency, Frequency, and Monetary.

Recency – When is the last time your customer purchased?

Frequency – How often do they buy?

Monetary – How much do they spend on average? What have they spent over their lifetime? Are they a high-roller?

It’s easy to tailor your promotions to match your prospect’s spending level and if you can sort your data by lifetime spend, it instantly tells you who your best customers are, so you can lavish them with marketing attention.

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